Dominic Lumabi sits on the computer in his Manila bedroom pitting his puffer fish-like cartoon NFT characters against others.
But this is not just a game; he is earning cryptocurrency to support his family during the COVID-19 pandemic.
The source of his income is Axie Infinity, a blockchain-based play-to-earn game that exploded in popularity in developing nations such as the Philippines as the fallout from the pandemic destroyed jobs and forced many to stay home.
Its fans, financial backers and creators, Vietnam-based Sky Mavis, say it is a revolutionary step towards the future of the Internet.
But detractors warn the game is a “house of cards” with some likening it to a fraud scheme driven by hype and speculation.
“At first, I was sceptical because I thought it was a Ponzi scam,” said Lumabi, 26, who began playing last June after losing his job at an advertising firm and making a failed foray into online selling.
About 35 % of Axie Infinity traffic – and the biggest share of its 2.5 million daily active users – comes from the Philippines, where high proficiency in English, strong gaming culture and widespread smartphone usage have fuelled its popularity according to Sky Mavis.
In Axie Infinity, players participate in battles using colourful blob-like Axies, and are mainly rewarded “Smooth Love Potion” (SLPs) that can be exchanged for cryptocurrency or cash – or invested back into the game’s virtual world, Lunacia.
Lumabi plays for two hours a day in the tiny house he shares with his parents and four sisters, earning 8,000 to 10,000 pesos (€136- €170) per month – nearly half of what he makes at his current job as a content moderator working nine-hour graveyard shifts.
He has used Axie Infinity earnings for his sister’s university fees, groceries and bills his father’s struggling electrical repair business cannot cover.
The pandemic was the perfect environment for this game to attract players from all walks of life, noted Leah Callon-Butler, a blockchain consultant based in the Philippines.
“They could sit at home, protected from the virus, and play a cute game and earn money from it,” she said.
In Axie Infinity, players participate in battles using colourful blob-like Axies, and are mainly rewarded “Smooth Love Potion” (SLPs) that can be exchanged for cryptocurrency or cash – or invested back into the game’s virtual world, Lunacia.
Lumabi plays for two hours a day in the tiny house he shares with his parents and four sisters, earning 8,000 to 10,000 pesos (€136- €170) per month – nearly half of what he makes at his current job as a content moderator working nine-hour graveyard shifts.
To play the game, players first have to purchase at least three Axies.
An Axie is an NFT – a unique, non-fungible token, with a particular set of abilities and characteristics.
Like NFT pieces of art, they are stored on the blockchain, a digital ledger that cannot be altered once something has been recorded onto it.
Axies can be bought, sold or rented to other players. Owners can also breed them to create new Axies that provide more value.
At the peak of the game’s growth last year, a starter team of Axies could cost hundreds of euros, far beyond the reach of aspiring players in poorer countries.
When AFP accessed the game’s marketplace on February 9, the cheapest Axies cost €32 each, putting the cost of a basic team at €98.
However, players who spend more get better Axies, giving them a better chance of winning battles to earn SLPs and the game’s other crypto token AXS.
Those with the capital to assemble more lucrative Axie teams have set up guilds and “scholarships,” profit-sharing systems where players are charged a percentage of their earnings.
The owners’ take can reportedly go as high as 30 per cent.
“We provide the players with the assets that they need to generate income for themselves,” said Luis Buenaventura, who runs Yield Guild Games in the Philippines, one of the many companies offering scholarships.
“In exchange for that, we ask for 10 % of their earnings”.
YGG alone has 8,000 scholars and a queue of around 60,000 people waiting to join its programme that offers training and mentoring to a limited number of players at a time.
Buenaventura said many of his players were in their early 20s and from households making less than €350 a month.
He described their monthly Axie winnings – around €172 – as “life-changing”.
It had been clear for months, however, that the game was facing an issue with its economy, and the SLP and the AXS have experienced the kind of volatility seen in many other crypto assets.
Last year, as the game upgraded to allow easier and cheaper trading, the value of SLP rocketed from around $0.03 (€XX) on April 26 to nearly $0.32 (€XX)on May 2 – more than 900 per cent in less than a week, according to crypto data provider CoinGecko.
But by the end of January this year, it had plunged to just a cent which had a huge impact on how much fiat currency players could earn.
Sky Mavis has made some tweaks to the game to limit how many SLPs a player can generate, acknowledging concerns about inflation and unsustainability.
The currency has since recovered slightly to around $0.03 (€0.026), but still far from the 2021 gold rush peak.
“People are starting to understand that it’s not free money falling out of the sky. You do have to understand how to play this game well,” said YGG’s Buenaventura.